As lockdown restrictions are eased, businesses may need help to re-open and to recover from the impact of the pandemic. Depending on the nature of the business, they may be eligible for a Restart Grant or a Recovery Loan.
The Restart Grant Scheme provides support to help business that were required to close to re-open as lockdown restrictions are eased. The grants are available to businesses in non-essential retail and businesses in the hospitality, accommodation, leisure, personal care and gym sectors.
The grants are available from 1 April 2021 and must be claimed from the local council. Applications can be made on the relevant council’s website.
To qualify, a business must:
- be based in England;
- pay rates; and
- be trading on 1 April 2021.
Non-essential retail business can apply for a Restart Grant of up to £6,000, whereas businesses in the hospitality, accommodation, leisure, personal care and gym sectors can apply for a Restart Grant of up to £18,000. Local councils will use their discretion to determine whether a business is eligible for a grant.
Recovery Loan Scheme
The Recovery Loan Scheme is designed to provide access to finance for UK businesses as they recover from the impact of the Covid-19 pandemic. Businesses of any size can apply for loans under the scheme, and can benefit from a loan or overdraft of between £25,001 and £10 million per business or asset finance of between £1,000 and £10 million per business. However, the amount offered and the terms are at the discretion of the lender.
To encourage lenders to participate, the Government guarantee 80% of the finance to the lender; however, the borrower remains liable for 100% of the debt.
A business can apply for a Recovery Loan if it is trading in the UK. Applicants will need to demonstrate that their business:
- would be viable were it not for the pandemic;
- has been adversely impacted by the pandemic; and
- is not in collective insolvency proceedings.
Businesses that meet the eligibility criteria can apply for a recovery loan, regardless of whether they also have a Bounce Back loan or a Coronavirus Business Interruption Loan. Under the scheme, no personal guarantees are taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
The scheme is due to run until 3 December 2021.
We've just released our simple COVID Business Support Guide, available to download for FREE now. A summary of the latest loans, payroll schemes, tax payment arrangements and more, this one-stop shop guide can point you in the right direction. If you're a business looking to ‘bounce back’ as we ease out of lockdown, get in touch to find out how Inform Accounting can help.
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